The investigator said that it is possible to use forensic intelligence tools to find illicit activities on blockchains. The investigation by the former CIA official found that Bitcoin and other cryptocurrencies are not full of fraud.

It is not all questioning of Bitcoin by US government officials like Treasury Secretary Janet Yellen. The crypto asset also receives the backing of a former agent of the country’s Central Intelligence Agency (CIA).

Former CIA Director Michael Morell, who worked at the agency for 33 years, recently released a document. There he refuted the old narrative that seeks to disqualify Bitcoin by linking it to illicit activities.

The new lobbying group Crypto Council for Innovation commissioned such a report. Its founding members include companies Coinbase, Fidelity Digital Assets, and Square.

While doing the work, Morell concluded that the broad generalizations about the use of Bitcoin in illicit finance are significantly exaggerated. Additionally, he found blockchain analysis to be a highly effective crime-fighting and intelligence gathering tool.

Bitcoin and Other Cryptocurrencies Are Not Full of Frauds

The former CIA director said that he did not expect to reach those conclusions when he began the investigation. He had wrongly assumed that Secretary Janet Yellen and European Central Bank President Christine Lagarde based their opinions on real facts.

Both officials point to Bitcoin as an instrument connected to money laundering and terrorist financing, among other crimes.

According to Lagarde, it is necessary to adopt a global regulation on Bitcoin and other cryptocurrencies. The former President of the International Monetary Fund (IMF) believes that Bitcoin greatly facilitates money laundering. Besides, she said that it is necessary to close any escape gaps to avoid this crime.

Janet Yellen, the new US Treasury Secretary, stated that regulatory mechanisms must adapt to new technological changes. In an address to the US Congress, she said that this would help block the financing of terrorism.

Despite what Lagarde and Yellen have said, Morell found “that [Bitcoin and other cryptocurrencies] were not full of illicit activity.” Furthermore, he explained that “there was probably less illicit activity in the Bitcoin ecosystem than in the traditional banking system.”

Blockchain Analysis Allows Finding Illegal Activities

The researcher explained that analytical firms such as Chainalysis, CipherTrace, and Elliptic use forensic intelligence tools to find illicit activities on blockchains. Morel said that he was “shocked by how they find an illicit activity,” which is “great intelligence work.”

The former CIA official mentioned the need to protect the privacy of citizens, referring to the analysis of movements in blockchains. “The 4th Amendment is paramount, and it is important to maintain the privacy and civil liberties of Americans,” Morel said. “Although it is sometimes difficult, it is always possible to do both,” he added

People generally Fear New Technology as They Do Not Understand It

The eight-page document concludes that various reasons lead to seeing such alarmist statements and articles about the threat of Bitcoin. Morell explains that people, in general, are afraid of this new type of technology as they do not understand it.

In addition to that, the investigator argues that bad news drives perceptions more than good news given that “fear is news.” He cites the case of the French citizen who sent Bitcoin to individuals involved in the insurrection on the US Capitol. There are multiple stories like that, where blockchain forensics help to solve a crime.

According to the former director, the transparency of the blockchain allowed law enforcement to quickly identify the trail of illicit payments. In contrast, payments through the traditional system could have proven to be more difficult to track.

By Alexander Salazar


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